The University Record, October 19, 1992

Hospital employees meet challenge, reap M-$hare benefits

By Jane R. Elgass

Though criticized by some as a low blow to morale of University employees who had no salary increase this year, John Forsyth thinks that the M-$hare program at University Hospitals was the right thing to do at the right time. And he points out that the program is not and never was intended to be a salary program. It's a one-time check rewarding innovative, hard work.

M-$hare challenged staff to save more money than was budgeted for day-to-day operations in teh Hospitals. What was gained---the amount beyond that budget---was shared---50 percent to employees and 50 percent to the Hospitals.

On Oct. 9, Hospitals employees and some staff from other units received checks of up to $2,507 each.

Forsyth, who is executive director of University Hospitals, says M-$hare is one in a series of programs to help the Hospitals cut costs and inefficiencies to place the institution at a competitive advantage.

Other programs include Total Quality activities and an Employee Suggestion Program that nets 10 percent of the first year's estimated savings for the person making a suggestion that is implemented.

Forsyth says that benefits attributable to Total Quality activaties since 1987 total more than $17.5 million in cost savings and additional revenue, against a cost of $2.5 million. "I would call that quite a return on investment."

The Employee Suggestion Program awarded $33,537 to 45 employees who submitted 52 award-winning suggestions, according to program director Rick Finger. The innovative ideas contributed more than $367,000 to the M-$hare program.

"We didn't want to be like Chrysler, taking measures only when we are on the brink of disaster," Forsyth explains.

"We needed to reposition our cost structure, with a goal of maintaining the cost-per-unit of services for four years, though inflation would increase 25 percent over the same period.

"We knew we could increase efficiency," Forsyth explains, "and the key to that is employees. Every organization has inefficiencies and those who are closet to the work know what they are. Our challenge was to determine how to empower employees, how to make them feel they are involved in the process, that they are stakeholders."

Forsyth says the M-$hare concept was approved by the University administration about 18 months ago as a four-year pilot program and a team was formed immediately that would come up with a program and handle implementation.

There were few constraints on the group as to how the program might be designed. And while cutting expenses was the primary focus, that didn't preclude increases in revenues.

The group was chaired by Anthony Denton, manager of employment and salary administration, Medical Campus Human Resources Department. Other members, one representative of each of the Hospitals' job families, were Jane Bell, David Burns, Catherine Cureton, Denise Fleming, Jackie Grudziecki, Cheryl Johnson, John Kettley, Rasjad Lints, Richard McTaggart, Barbara Roderick, Mike Strother, Gerard vanDecandelaere, Ramesh Verma, and Timothy Wood.

Forsyth says the biggest debate related to M-$hare was determining who would receive the funds.

"We took the total quality management approach to this question. Everyone has the ability to significantly contribute so everyone would share fully in the benefits. To do otherwise would create divisiveness, and one of the goals of M-$hare was to build a sense of community among our staff."

Forsyth says that "real test" in determining eligibility was whether a person's work helps in a direct way to curb or control expenses. For this reason, approximately 600 Medical School employees also share in the program, as they do the same work as some Hospitals' employees.

"There are staff in research laboratories who feel they contribute to the Hospitals, and rightly so," Forsyth says. "But they don't pass the test of direct impact."

Forsyth hopes to meet with the researchers to explain the basis of the program. "We value them and their work," he says.

Forsyth says the program has been more successful than anticipated, for which he credits the enthusiasm and energy of the staff. "It's exciting to reduce room rates by 20 percent and give everyone a one-time check of major consequence." During the program's planning stage, analysts projected figures between $300 and $500.

There were no single, large expenses that were pared, but rather a "huge collection of little things," Forsyth says.

"We asked people to ask themselves, 'Is everything we do necessary? Are there steps that we take that don't add value to what we do? Are we doing something just because it's always been done that way? Are we generating reports that are not used?'"

Forsyth says this approach parallels total quality management (TQM) concepts. "We need to have a continuous effort and commitment directed to improvement. We have to improve the quality of our services while cutting expenses. The way to do this is to build a sense of community in which everyone has a part."

Forsyth says others in the University community should be pleased that the program has worked so well. "The Hospitals are part of the University, contribute to its educational mission. We are in a different industry, however, and we have to be competitive. If we're not, we would become a drag on the General Fund."

M-$hare eligibility

Employees eligible for the first year of the M-$hare program were those in regular, non-instructional job families paid on Hospitals accounts and selected staff from other Medical Center areas who contribute on a regular basis to the Hospitals' operations. Employees with less than six months of active service in an eligible category on June 30 were not eligible.

A "full share" was $2,507, based on working 11 or more months during fiscal 1991--92 on a 100 percent appointment as of June 30. Some received less based on length of active service and appointment fractions.

Spotlight on success

Listed here are a few of the money-saving ideas implemented by Hospitals employees that netted $36,974,666, with half going to employees and the other to the Hospitals for investment in the future.

---Phlebotomists now draw blood from infants in their mother's rooms, saving approximately 10 minutes each time. Prior to the change, nurses would take the infants to a central nursery. Mothers prefer the change because they can immediately console the infant.

---Maintenance workers now spend more time comparing costs and checking to see if repair items are covered by warranty. In some instances, overcharges were reimbursed by vendors.

---One units was advised that it could have saved $25 on a battery order had the order been placed with Materiel Services.

---Maintenance workers removed from their phone system several options they were not using.

---A Target Drug Program has saved close to $1.3 million over the past three years. It's focus is on educating physicians, nurses and others on the most efficient use of drugs, particularly expensive drugs that are frequently prescribed.

---Reviews of service contracts showed that with additional training and schedule coordination staff could cover several areas, such as routine inspections, themselves.

$23,335 was saved by switching to a generic brand of pillow speaker cords for nurse call lights, and the generic cords were of better quality.

---The maintenance service area was expanded to include 17 sites in Ann Arbor and outlying areas, charging less than what the units were charged under the previous system.

---Robocart doors are now being repaired rather than replaced, saving $36,500. Replacement doors cost $615 each.

---Reusable containers for infant formulas have replaced disposable bottles, resulting in $5,000 in savings.

---Two ideas netted $45,089 in savings: using a less expensive respiration bag for patients who need oxygen and using a less expensive IV set to administer fluids, which actually is better because it has a pump.

Some of the material for this article was derived from the Hospitals' employee publication, the Star, written by writers/editors Theodosia Spaeth and Karen Thomas.